Idaho Dropped This Prison Contractor in 2021. A $31.3 Million Fight Is Still Alive
A federal case traces years of prison medical bills through a disputed corporate restructuring and an unfinished payment plan.
Idaho ended its relationship with a longtime prison health contractor in 2021. The financial fight outlived the contract.
St. Luke's Health System filed a federal lawsuit in Boise on June 2 seeking to recover a $31.3 million claim tied to medical care for people in Idaho prisons. The complaint names a former Corizon Health director and several related companies. It alleges that money and operating assets moved away from Corizon before its liabilities were placed in a company later renamed Tehum Care Services, which entered Chapter 11.
The state is not a defendant in the new case, and Idaho's current prison medical provider is Centurion. Still, the dispute grew from a state contract and now presents a durable public accountability question: what protects patients, hospitals and taxpayers when an outside company performs a core government duty and the unpaid bills survive the deal?
The claim started with outside hospital care
Corizon contracted with the Idaho Department of Correction to provide medical care inside state prisons and pay hospitals for treatment that could not be delivered there. According to St. Luke's bankruptcy filing, a January 2011 agreement set the reimbursement terms for that outside care. Reporting on the new lawsuit says the rate was 76 percent of billed charges.
The arrangement broke down in 2014, when Corizon began using the lower Idaho Medicaid rate instead. A unanimous Idaho Supreme Court decision in January 2018 rejected the statutory reading behind that payment method. St. Luke's later sued in federal court to recover the difference.
The numbers accumulated for years. In its August 2023 proof of claim, St. Luke's listed $14.15 million in principal from the earlier payment dispute and more than $15.35 million in interest calculated through October 2022. It also listed nearly $1.6 million in unpaid principal under a later hospital services agreement, plus more than $204,000 in interest. The total claim was $31,304,520.14.
Those figures are not a new request for state spending. They are the hospital system's asserted claim against the former contractor and associated parties. But they show how quickly unclear payment rules and unresolved contract disputes can become an eight-figure problem.
The bankruptcy plan did not end the fight
Tehum filed for Chapter 11 protection in the Southern District of Texas on Feb. 13, 2023. The bankruptcy case gathered claims from hospitals, other vendors and people who had sued over correctional medical care in several states.
In a February 2025 court declaration, St. Luke's deputy general counsel David Barton said a negotiated plan offered unsecured creditors their best available path to recovery. Barton was serving as chair of the official committee representing those creditors. He said the plan would require settling parties to fund trusts or risk losing legal releases.
That process did not close the Idaho claim. The new complaint alleges that roughly $31 million moved out of Corizon accounts between 2021 and 2022, including $5.5 million sent to Geneva Consulting under an agreement for which St. Luke's says no services were provided. The lawsuit also challenges financial records used to support the corporate restructuring.
Those are allegations, not court findings. The former director, Isaac Lefkowitz, had not filed a response in the Idaho case when the latest reporting was published. In related litigation, he denied comparable claims involving the movement of money and the accuracy of financial records.
Idaho has a new contractor but an old lesson
The Department of Correction now identifies Centurion as the company providing direct medical care in Idaho prisons. The agency says five registered nurses monitor and audit that contract using its terms and national correctional health standards.
That oversight is the practical stake in a case about a former vendor. Reliable prison operations require medical care that works, hospital agreements that can be enforced and financial controls that remain visible when ownership or corporate structure changes. Idaho taxpayers should not have to discover years later that the accountability trail ended before the invoices did.
The federal court will decide whether St. Luke's can recover from the people and companies it sued. Idaho's job is broader: make the next contract easier to audit, harder to evade and clear enough that a payment dispute cannot spend another decade growing. The old contractor is gone. The accountability test is not.